Since holding the PP, market predictions have little meaning to me. When I see money managers on CNBC with bold and confident predictions I laugh to myself because I have fully embraced the notion that financial markets are unpredictable. I still enjoy watching them, but strictly for entertainment value. It amazes me how confident they are in their predictions. Of course, many of them have clients to impress and bold predictions help justify their fees. I have found that clients are surprisingly forgiving to managers that make huge blunders. As long as the manager has a new tale to tell and a new prediction, investors stay.
I am still adjusting to the complete apathy I feel towards financial markets directions. When I was doing fundamental analysis to pick stocks that I felt were undervalued, I was glued to the financial markets. Hours were spent each day reading news articles and dissecting earnings reports. I couldn't help but experience a pang of fear whenever a bearish article was released. Similarly, bullish pitches gave me a greedy high egging me on to take risk. I could feel my emotions being pulled by whatever data was fed to me. I was lucky enough to outperform the S&P 500 with my picks, but at what cost?
Today, financial markets directions have no bearing on my emotions. How could they? After all, I am confident that my portfolio can withstand most any storm. I am convinced that the low correlations of the PP's assets will persist because they are fundamentally very different asset classes that respond to different environments for clear discernible reasons.
Of course, nothing is perfect. I'm sure that the PP will have some years where it posts small losses, but what strategy doesn't? Is the PP absolutely 100% economically neutral? Probably not, but it is pretty darn close. It definitely isn't a broken portfolio, why mess with it?
I am a happy investor. I have an investment strategy that I can believe in philosophically, with strong backtesting data to verify the hypothesis. I sleep well knowing that I will do okay even if we experience hyper-inflation. I sleep well knowing that I am protected from a catastrophic Japanese-like deflationary fall out. I sleep well knowing that I have stocks to participate in the growth of the global economy.
No matter the possible outcome, I sleep very well.